Municipal bond traders were set for more supply to price on Wednesday after seeing over $4 billion of new deals hit the market on Tuesday.
Ramirez & Co. is set to price Illinois State Toll Highway Authority's $400 million of senior revenue bonds.
Ahead of the sale, Moody's Investors Service, Standard & Poor's and Fitch Ratings affirmed their ratings on the authority's $5.8 billion of outstanding debt secured by toll revenues. The new deal is rated Aa3 by Moody's and AA-minus by S&P and Fitch. All three agencies assign a stable outlook.
The authority operates under its own independent statutes with its revenues and operations segregated from that of the state.
Proceeds from the sale will finance ongoing projects in system's 15-year "Move Illinois" program while some will also go into the debt service reserve.
Also on Wednesday, Citigroup will price the San Diego Unified School District, Calif.'s $450 million 2016 general obligation bond sale, consisting of $350 million of Series F GOs and $100 million of Series G GO green bonds. The deal is rated Aa2 by Moody's, triple-A by Fitch and AA-plus by Kroll Bond Rating Agency.
The bonds are being issued as current interest bonds under the Election of 2012 approval and are dedicated unlimited ad valorem property tax bonds. It will be the sixth and seventh issuance of GOs under the Election of 2012 mandate.
And Stifel is set to price the city of Industry, Calif.'s $345 million of Series 2015A taxable senior sales tax revenue refunding bonds. The deal is rated A by S&P.
In the competitive arena, Montgomery County, Md., is selling $300 million of Series 2015 B general obligation consolidated public improvement bonds. The issue is rated triple-A by Moody's, S&P and Fitch.
Since 2006, Montgomery County has issued roughly $4.71 billion of debt. MoCo sold its largest amount of bonds in 2011 and 2014, when it issued $719 million and $810 million, respectively. The county sold its lowest amount of bonds in the consecutive years of 2006 and 2007, when it came to market with $200 million and $299 million, respectively. On average in the past 10 years, the MoCo has come to market four times a year.
Secondary Market
Treasury prices were lower on Wednesday. The two-year Treasury yield rose to 0.88% from 0.85% on Monday while the 10-year Treasury yield increased to 2.30% from 2.25% and the 30-year yield gained to 3.07% from 3.04%.
Top-quality municipal bonds finished stronger on Tuesday. The yield on the 10-year benchmark muni general obligation was two basis points lower at 2.14% from 2.16% on Monday, while the 30-year yield was off three basis points to 3.11% from 3.14%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Tuesday at 94.1% from 94.9% on Tuesday, while the 30-year muni to Treasury ratio stood at 101.1% compared to 102.1%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 42,958 trades on Tuesday on volume of $7.93 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $5.21 billion to $7.73 billion on Wednesday. The total is comprised of $1.91 billion competitive sales and $5.82 billion of negotiated deals.
Yvette Shields contributed to this report
